EUR/USD Is At Risk Of More Losses

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Key Highlights

  • The Euro started a downside move and traded below the 1.1550 support against the US Dollar.
  • There is a key bearish trend line in place with resistance at 1.1530 on the 4-hours chart of EUR/USD.
  • The US NFP figure in Sep 2018 came in at 134K, less than the forecast of 185K.
  • Today, the Euro Zone Sentix Investor Confidence for Oct 2018 will be released, which is forecasted to increase to 12.5.

EURUSD Technical Analysis

The Euro started a short-term recovery after trading as low as 1.1460 against the US Dollar. The EUR/USD pair tested the 1.1550 level, which acted as a resistance for buyers.

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Looking at the 4-hours chart, the pair is clearly under a lot of pressure and is trading well below the 1.1600 and 1.1550 pivot levels. The pair recovered recently from the 1.1463 low and traded above the 1.1500 level.

However, the upside move was capped by the 1.1550 level, which was a support earlier and now it is acting as a resistance. Moreover, there is a key bearish trend line in place with resistance at 1.1530 on the same chart.

The pair is currently trading below the 1.1520 level and it could continue to move down towards the 50% Fib retracement level of the last wave from the 1.1463 low to 1.1549 high.

There could be a short-term upside correction, but gains are likely to be limited unless EUR/USD settles above the 1.1550 resistance level. On the downside, supports are visible near 1.1500 and 1.1460.

Fundamentally, the US NFP figure for Sep 2018 was released recently. The market was looking for an increase in jobs by around 185K from August to Sep 2018.

However, the result was below than the market forecast as the Nonfarm Payrolls increased 134K, less than the forecast of 185K. On the positive side, the last reading was revised up from 201K to 2017K. Moreover, the unemployment rate declined from 3.9% to 3.7%.

The US Dollar was down a bit after the release, but later it recovered and it seems like major pairs like EUR/USD and GBP/USD may continue to move down in the near term.

Economic Releases to Watch Today

  • Germany’s Industrial Production for August 2018 (MoM) – Forecast -0.5%, versus -1.1% previous.
  • Euro Zone Sentix Investor Confidence for Oct 2018 – Forecast 12.2, versus 12.0 previous.
 
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